Chip glut ebbs

January sales down on December

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The chip industry has dragged itself through the silicon glut it fell into last year, the Semiconductor Industry Association declared yesterday.

Worldwide chip sales in January were $18.4bn, the trade group reported Thursday, up 17.5 per cent on the year, but down 0.5 per cent sequentially.

The group described the sales slip as "modest" and an "encouraging sign", as January is historically a weak month.

More importantly, it said, the industry is not handicapped by either production capacity or excess inventory.

Surging 2004 sales were thrown off course in the second half as inventories ballooned. These have now been depleted, the SIA said, and in some segments inventories are below target. Inventory overhang should not be a problem beyond the current quarter, it said.

Asia Pacific continued to dominate sales, accounting for $7.76bn of the total, up 0.1 per cent sequentially and 27.9 per cent on the year. Japan's sales were $3.87bn, up 0.2 per cent sequentially and seven per cent on the year. European sales were $3.47bn, down 1.7 per cent sequentially but up 17.9 per cent on the year, while sales in the Americas were $3.18bn, down 1.8 per cent sequentially and up 8.3 per cent on the year. ®